KT Admits "Poor Management of Femtocells"…MSIT "Investigating Possibility of Clone Phones"

KT Begins Analysis of All SMS for Micro-payment Fraud, Beyond ARS

Government "If Evidence of Server Disposal/Concealment, Will Refer KT for Investigation"

KT CEO Kim Young-seop responds to questions during a hearing on large-scale telecommunications and financial hacking incidents at the National Assembly's Science, ICT, Broadcasting and Communications Committee in Yeouido, Seoul. (Seoul=Yonhap News) Reporter Kim Ju-seong = On September 24, 2025. 9.24 utzza@yna.co.kr

KT admitted on the 24th that its management of ultra-small base stations (femtocells), which are presumed to have been used in unauthorized micro-payment fraud, was insufficient. The company also announced that it is assessing the extent of damages by examining all micro-payment authentication methods, including text messages (SMS).

Authorities stated that they are closely investigating the possibility of clone phones being created due to KT's hacking, and will take strong measures, including referring KT for police investigation, if intentional concealment, such as delayed reporting, is found.

During a hearing on the KT and Lotte Card hacking incidents, held by the National Assembly's Science, ICT, Broadcasting and Communications Committee, KT CEO Kim Young-seop testified as a witness and said, "Upon reviewing the status of femtocell management after the micro-payment incident, we found many loopholes and poor management. After the incident, we took measures to prevent (illegal femtocells) from connecting to the network."

In response to a question from Representative Lee Sang-hwi (People Power Party) asking if an outsourced company is responsible for the installation and management of femtocells, CEO Kim replied, "Yes," and acknowledged the criticism that poor management was the cause of the incident, stating, "I admit it."

When Representative Hwang Jung-a (Democratic Party of Korea) pointed out that KT was passively investigating the extent of damages based solely on ARS authentication, CEO Kim stated, "The analysis takes time, so we initially analyzed based on ARS. We are now analyzing data related to all authentication methods, including SMS," announcing an expansion of efforts to determine the scale of damages.

When Representative Hwang urged CEO Kim to promise to step down from his position after taking responsibility for the unauthorized micro-payment incident, he responded, "It is inappropriate to make such statements now. We must first do our best to resolve this situation."

In response to a question from Representative Park Jung-hoon (People Power Party) asking if there is a risk of clone phones being created, even though KT claims that key personal information for clone phone generation, such as authentication keys, was not leaked through the hacking, Ryu Je-myeong, the Second Vice Minister of Science and ICT, replied, "We will thoroughly examine those aspects as well."

Vice Minister Ryu added, "KT has reported that authentication keys have not been leaked. However, we will thoroughly investigate without relying solely on KT's statements during the joint government-private investigation."

Furthermore, when Representative Park asked if it was possible for the Ministry of Science and ICT to investigate suspicions of KT's server disposal and consider taking legal action, Vice Minister Ryu stated, "As soon as we determine if there was intent behind server disposal or delayed reporting, we will take strong action, including referring the case for police investigation if necessary." Yonhap News